Apple iPhone 18 Pro Max material costs could increase by almost $300
According to a new analysis by Counterpoint Research, the material costs for the Apple iPhone 18 Pro Max are expected to increase by almost $300 compared to the iPhone 17 Pro Max. This estimate refers to the 1TB storage model. The cost of the device’s NAND flash memory alone is estimated to exceed $250, which is roughly half of the total estimated material costs of the iPhone 17 Pro Max.
DRAM prices are also rising rapidly, as both components are under pressure due to a general shortage of memory chips, which is linked to the sharply increasing demand for AI hardware.
Apple iPhone 18 Pro Max with expensive 2nm chipset
Apple’s anticipated switch to a 2nm chipset is considered the second largest cost factor. Rumors suggest that the Apple iPhone 18 Pro Max will be equipped with the A20 Pro, manufactured using TSMC’s N2 process. This process is expected to have a significantly higher wafer price compared to the current N3P process used for the A19 Pro. The initial production costs for a new process also typically contribute to a higher unit price for the chip.
According to Counterpoint, the costs for the display and other components could even decrease compared to the iPhone 17 Pro Max, which would partially offset the increased storage and chip costs. Camera costs, however, are expected to rise slightly, which the company attributes to new technologies – presumably a reference to the variable aperture main camera rumored for the Pro models.
The report comes a few weeks after Apple raised prices on 14 products, including all Macs and iPads, as well as Apple TV, HomePod, HomePod mini, and Vision Pro. Apple justified the price hikes by citing the same memory chip shortage mentioned in the Counterpoint report. The imbalance between supply and demand caused by the expansion of AI data centers has necessitated further price increases. Prices for iPhone, Apple Watch, and AirPods remained unchanged in this round of price hikes, but it is widely expected that the iPhone 18 Pro series will be next.
The Wall Street Journal previously reported that the price of the iPhone 18 Pro could rise to as much as $1,399. The report cited estimates that the cost of DRAM per unit could increase from $39 to $145 and the cost of flash memory from $13 to $51 as the reasons for the price hike. Apple CEO Tim Cook told the Journal that the company was still working on determining which devices would be affected by price increases. Separately, IDC estimated a $200 price increase specifically for the Apple iPhone 18 Pro Max (and the regular Pro model), while leakers on Weibo suggested Apple might raise the Chinese starting price for the entire product line by around 11%.
To manage higher costs without completely sacrificing profit margins, Apple is expected to implement differentiated price increases for the various storage capacities, rather than raising prices across the board. The impact will be concentrated on the models with higher storage capacities. Even with an average price increase of $200, Counterpoint anticipates that the Apple iPhone 18 Pro Max will have a slightly lower gross profit margin than the iPhone 17 Pro Max will in 2025.
The Apple iPhone 18 Pro Max is expected to launch in the fall, alongside Apple’s first foldable iPhone Ultra.
